PRINTER'S NO. 2744
No. 2081 Session of 1989
INTRODUCED BY RYBAK, DeWEESE, ITKIN, FEE, KUKOVICH,
YANDRISEVITS, GRUPPO, WAMBACH, F. TAYLOR, TIGUE, BLAUM,
McCALL, KOSINSKI, COHEN, JOSEPHS, ARGALL, VEON, MICHLOVIC,
LAUGHLIN, CARN, PESCI, MAIALE, HOWLETT, E. Z. TAYLOR,
BELFANTI, McNALLY, LEVDANSKY, J. TAYLOR, LASHINGER, WILLIAMS,
MORRIS, STISH, NAHILL AND MELIO, NOVEMBER 15, 1989
REFERRED TO COMMITTEE ON INSURANCE, NOVEMBER 15, 1989
AN ACT
1 Creating the Citizens Insurance Advisory Council; providing for
2 the powers and duties of the council; and granting powers to
3 and imposing duties upon the Department of Insurance.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Insurance
8 Consumer Protection Act.
9 Section 2. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Council." The Citizens Insurance Advisory Council
14 established under section 3.
15 "Department." The Insurance Department of the Commonwealth.
16 Section 3. Citizens Insurance Advisory Council.
1 (a) Establishment.--There is hereby created the Citizens
2 Insurance Advisory Council to represent the interest of
3 consumers before the Insurance Department.
4 (b) Composition.--The council shall consist of the following
5 members:
6 (1) The Insurance Commissioner or his designee.
7 (2) Four members who shall be appointed by the Governor,
8 no more than two of whom shall be of the same political
9 party.
10 (3) Four members who shall be appointed by the President
11 pro tempore of the Senate, no more than two of whom shall be
12 of the same political party.
13 (4) Four members who shall be appointed by the Speaker
14 of the House of Representatives, no more than two of whom
15 shall be of the same political party.
16 (c) Correlation of appointments.--The appointing officers
17 shall correlate their appointments in such a manner as to insure
18 that all geographic regions of this Commonwealth are
19 represented.
20 (d) Limitation on employment.--The appointed members of the
21 council shall be citizens of this Commonwealth who, during their
22 respective terms, shall hold no State office to which salary is
23 attached except that of membership of the council. The appointed
24 members shall not be employed in or in any manner affiliated
25 with the business of insurance.
26 (e) Terms of office.--The term of office of each appointed
27 member shall be three years, measured from the third Tuesday of
28 January of the year in which he takes office, or until his
29 successor has been appointed, except that, in the initial
30 appointments of the members of the council, the respective
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1 appointing authorities shall appoint two members for terms of
2 two years each and two members for terms of three years each.
3 (f) Chairman.--The council shall annually elect one of its
4 appointed members as chairman and shall elect a secretary who
5 need not be a member of the council.
6 (g) Meetings.--Meetings of the council shall be held at
7 least monthly or at the call of the chairman.
8 (h) Compensation.--Each member of the council other than the
9 Insurance Commissioner shall receive $100 per diem when actually
10 attending to the work of the council. Members shall also receive
11 the amount of reasonable traveling, hotel and other expenses
12 incurred in the performance of their duties in accordance with
13 Commonwealth regulations.
14 (i) Employees.--The council shall have the power to employ
15 and fix the compensation of such experts, stenographers and
16 assistants as may be deemed necessary to carry out the work of
17 the council, but due diligence shall be exercised by the council
18 to enlist such voluntary assistance, generally recognized as
19 qualified to aid the council, as may be available from citizens,
20 research organizations and other agencies in this Commonwealth
21 or elsewhere.
22 Section 4. Powers and duties of the council.
23 (a) General powers and duties.--The council shall have the
24 following powers and duties:
25 (1) Consider and make recommendations as to changes in
26 applicable statutes, departmental regulations and
27 administrative practice, for the purpose of enabling the
28 Insurance Department to more adequately serve insurance
29 consumers.
30 (2) Study and review the work of the Insurance
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1 Department. For this purpose, the council shall have access
2 to all books, papers, documents and records pertaining to or
3 belonging to the department.
4 (3) Confer with and advise the Insurance Commissioner
5 and his staff on methods by which the department may improve
6 service to the insurance consumer.
7 (4) Report annually to the Governor and to the General
8 Assembly and make such interim reports as are deemed
9 advisable.
10 (5) Assist the Insurance Commissioner in the development
11 and distribution of consumer educational materials and
12 information on insurance.
13 (6) Perform such other duties as may be assigned to it
14 by the commissioner or by the General Assembly.
15 (7) Represent the interest of consumers as a party, or
16 otherwise participate for the purpose of representing an
17 interest of consumers, before the Insurance Department in any
18 matter properly before the Insurance Department, and before
19 any court or agency. The council may also authorize the
20 initiation of proceedings if in its judgment such proceedings
21 may be necessary in connection with any matter involving
22 regulation by the Insurance Department, including, but not
23 limited to, changes in insurance premiums.
24 (b) Exercise of discretion in representing consumers.--The
25 council may exercise discretion in determining the interests of
26 consumers that will be advocated in any particular proceeding
27 and in determining whether or not to participate in or initiate
28 any particular proceeding and, in so determining, shall consider
29 the public interest, the resources available and the
30 substantiality of the effect of the proceeding on the interest
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1 of consumers. The council may refrain from intervening when in
2 its judgment intervention is not necessary to represent
3 adequately the interest of consumers.
4 (c) Representation upon petition.--In addition to any other
5 authority conferred upon it by this act, the council is
6 authorized to represent an interest of consumers which is
7 presented to it for consideration upon petition, in writing, by
8 a substantial number of persons regarding insurance issues
9 subject to regulation by the Insurance Department. The council
10 shall notify the principal sponsors of a petition within a
11 reasonable time after receipt of any action taken or intended to
12 be taken by it with respect to the interest of consumers
13 presented in the petition. If the council declines or is unable
14 to represent such interest, it shall notify the sponsors and
15 shall state its reasons therefor.
16 (d) Initiation of action.--Any action brought by the council
17 before a court or an agency of the Commonwealth shall be brought
18 in the name of the council. The council may name a consumer or
19 group of consumers in whose name the action may be brought or
20 may join with a consumer or group of consumers in bringing the
21 action.
22 (e) Statement of consumer interest.--At such time as the
23 council determines, in accordance with applicable time
24 limitations, to initiate, intervene or otherwise participate in
25 any agency or court proceeding, it shall issue publicly a
26 written statement, a copy of which shall be filed in the
27 proceeding in addition to any required entry of appearance,
28 stating concisely the specific interest of consumers to be
29 protected.
30 Section 5. Executive director.
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1 (a) Employment.--The council shall employ a full-time
2 executive director and any clerical or support staff deemed to
3 be necessary. Salaries shall be determined by the council and
4 shall be paid from the general budget appropriation to the
5 Insurance Department.
6 (b) Duties.--The executive director shall monitor the
7 activities of the Insurance Department and communicate such
8 information to the council.
9 Section 6. Duties of Insurance Department.
10 In dealing with any proposed action which may substantially
11 affect the interest of consumers, including, but not limited to,
12 a proposed change of rates and the adoption of rules,
13 regulations, guidelines, orders, standards or final policy
14 decisions, the department shall:
15 (1) Notify the council when notice of the proposed
16 action is given to the public or at a time fixed by agreement
17 between the council and the department in a manner to assure
18 the council reasonable notice and adequate time to determine
19 whether to intervene in such matter.
20 (2) Consistent with its other statutory
21 responsibilities, take such action with due consideration to
22 the interest of consumers.
23 Section 7. Reports.
24 The council shall annually transmit to the Governor, the
25 Attorney General and the General Assembly, and shall make
26 available to the public, an annual report on the conduct of the
27 council. The council shall make recommendations as may from time
28 to time be necessary or desirable to protect the interest of
29 consumers.
30 Section 8. Savings provision; construction.
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1 (a) Right of action preserved.--Nothing contained herein
2 shall in any way limit the right of any consumer to bring a
3 proceeding before either the Insurance Department or a court.
4 (b) Power of Insurance Department not impaired.--Nothing
5 contained herein shall be construed to impair the statutory
6 authority or responsibility of the Insurance Department to
7 regulate insurers in the public interest.
8 Section 9. Effective date.
9 This act shall take effect in 90 days.
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